Many students out there are going to apply for financial aid, solely based on the fact that most 18 year olds don’t have $40,000 laying around to fund their education. Yes, I know there is a first for everything and while financial aid was confusing to me, I seemed as if I were a pro after my college career was done with.
When you’re ready to fill out your financial aid application, there are going to be some terms that you’re going to want to know about when you’re ready to start.
I’ve listed some of the terms that you’re going to see, as well as a definition on what they are all about:
Academic Year: This is going to vary from school to school, but you want to know what your academic year consists of. It will usually consist of your fall, winter, as well as spring quarter.
Annual Limit: This is going to be the maximum limit that you’re going to be able to borrow for a certain loan.
Assets: Your financial worth. This is going to consist of your personal, as well as your family’s net worth. You will want to look at the financial aid fine print on what they include.
Budget: How much you’re going to pay for the college year. Include things such as tuition, your room and board, as well as meal plans.
Citizen / Eligible Non-Citizen: Asking if you’re a U.S. citizen. If you’re from outside of the United States, you will want to make sure that you have a qualifying Visa.
Co-signer: If you don’t qualify for a loan on your own, you may find that you’re going to have to get a co-signer to sign on the loan with you. The co-signer will share responsibility.
Dependent Student: This is a student that is under the age of 24 who doesn’t qualify as a student per federal rules.
EFC: Known as expected family contribution where your family resources should be available so that you can help pay for your educational related costs.
FAFSA: A free application for federal student aid. This is the free version online that you can fill out to apply for types of financial aid.
Forbearance: This is when you will get the bank / lender to postpone repaying your loan back for a certain period of time. You will usually have to show that you can’t pay your loans back for the time being.
Grace period: This is the time after graduation, where you don’t have to start paying back the loan. You will usually have to wait 6 – 12 months after college to start paying back loans.
Independent Student: This is a student who is older than 24 years old or a student who has deceased parent, or falls under special circumstances. You can view more information here.
Promissory note: A contract legally binding both you and your bank / lender. Be sure to read all terms and conditions.
SAR: Stands for student aid report. This summarizes all of your information that you provided for the FAFSA form.
Work study: This is for self help aid.
There are tons of terms that you need to know about financial aid, but you’re going to find that the ones mentioned above are usually the ones that you’re going to see on most forms. Be sure to read into these and know what you’re getting into when filling out a form. The more you know, the better you’re going to be.